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A Compact Dynamic Positioning System of General Purpose for Marine Units, Crafts and Ships

Periodic Reporting for period 1 - General Purpose DP (A Compact Dynamic Positioning System of General Purpose for Marine Units, Crafts and Ships)

Reporting period: 2014-07-01 to 2014-12-31

Operation of floating units in the sea often requires the units to maintain position, as for instance in the rescue after a ship wreck or when assisting a wind farm. Due to the stochastic behaviour of the sea, Dynamic Positioning (DP) Systems accurately automate this task reducing the risk of human error. However, current DP1 systems in the market evolve from those used in the Oil&Gas, which are highly redundant and expensive.
Seaplace has designed SeaDP-1C, a DP1 System that is cheap, robust, requires little space, and provides great flexibility due to its modularity. Our DP will come with a smart green autopilot, which, by filtering waves, corrects accurately the drift course, reducing consumption by 1 to 3%. With SeaDP-1C we will generalize the use of smart control and manoeuvring.
As a naval architecture firm with 34 years of experience, Seaplace knows many different players of the marine sector interested in SeaDP. Shipyards can choose the provider of a system among those approved in the maker’s list, and ours will offer a great price. Providers of propulsion systems and electronic installations without DP will use the modularity of our system to offer turnkey projects. Shipowners without DP will also install our system because of its price and consumption reduction.
In Phase 1 we have confirmed the costs, market opportunity and planned the implementation. In Phase 2 we will build and check the real product, install it aboard, and get the Class Approval so that we can start selling it, which will convert us onto a high-growth company.
Through our system, the EU will get a feasible way to increment the safety at sea, allow more efficient operations and minimize fuel consumption and emissions.
During Phase 1 we have carried out a feasibility assessment that confirms the expectations for the business:
• Technical studies: We have confirmed the technical requirements for the product depending on the different segments
• Economic studies: We have obtained the prices of other DP1 systems in the market, as well as of those systems providing functions that a DP does (autopilot, joystick, trip computer, etc.). We have also analysed the costs of our DP1 system: software, hardware, installation, maintenance services, advertising, etc.
• Market acceptance confirmation by:
1. Analysing the market figures and characteristics of all defined market segments
2. Getting the feedback from potential customers. Based on the trustful relation we have with our customers, we have carried out surveys directed to them answering the following main points:
- Technical capabilities they expect from a DP1 system in order to be interesting for their fleet. In how many of their units/year would they install it? And in how many old units?
- Will it make a difference if it allows your units to lower consumption in long voyages? How much are you willing to pay for a DP1 in such case? It will depend on the size of the vessel, and it might make sense only for relatively big crafts and units, so we must focus on the interesting ones. In how many of your units per year would you install it? And in how many old units?
- Did any obstacle (beside the economical) prevent you from acquiring a DPS in the past?
3. In the yachting Industry we have analysed our main customer by reading technical reviews of their models, and with meetings with them.
• We have developed the business model (confirming the business opportunity), the commercialization plan and the implementation plan (including human resources). The work in Phase 1 has allowed us to confirm all the hypotheses already mentioned: costs involved (commercialization and funding), market opportunity, the return of investment, financial analysis, interest from customers, profit margin, etc.
• Intellectual property studies

The main conclusion of the different studies carried out within this phase 1 is that we believe that project shall continue. Development of phase 1 has allowed us to refine the whole project and confirm the business potential. Although the main ideas remain the same, some details have changed:
1. The objectives of the excellence section remain the same, but the concept and approach has changed slightly. In this part we have decided to:
a. Include some sensors in the hardware to be supplied with the controller unit because not many vessels have them, i.e. the wind sensor, the DGPS, and the IMU unit will come with the unit, and the quality of the selected sensors will be proportional to the segment needs in order to be cost effective.
b. Provide different functions in the system that suit the different market segments. For example, a low-speed mode is mainly useful for the yacht segment, and it is thanks to the conversations with this market that we have decided to include it (as it is less typical of classic DP units). These new functions are very easy to implement, since they are just a new way to control the core of the system. In the case of the low-speed mode we only need to change the speed range for the joystick and update the user interface to add the function.
c. Reduce the price of the equipment by finding the appropriate units. For instance, thanks to the suggestion by National Instruments, we have reduced the price of the cRIO unit almost a third, since we have selected the cRIO 9031 instead of the more expensive and thus out-of-purpose cRIO 9082 (which was the one selected for the proposal of Phase 1).
2. In the impact section we have made the following changes:
a. We have added a new market segment, so there are 4 right now. Namely, we have split in two the third market segment, since although the value proposition is the same f
The expected result is seaDP, a hi-tech product that will focus on the new Industry requirements and operations with the ambition of broadening the DP market to seagoing vessels and marine units involved in low-risk operations. The wider market will help us to lower the price per unit.

The expected growth potential due to SeaDP-1C is rather high regarding the turnover.
1. We expect a turnover increase of 25% the 1st year, 42% the 2nd, and 100% on the 3rd year of sales, obtaining around 6 million € in the third year.
By the end of the third year we will be able to sell more complex products (DP2), also with big savings in price and hence we will show a more stable position in the market, with even greater turnover, being ready to face a competition that will copy our focus.
2. Employment: the team will start with 14 engineers, where 2 will be new employees, and we expect to create employment with an increase of 3 more engineers the 2nd year, 5 more in the 3rd year, and 10 more in the 4th year. The maintenance and installation company will also benefit and experience employment growth.
3. The market size is huge, since a very small percentage of the targeted vessels come with this system, and we are talking about thousands of units throughout Europe and the world. The timing is perfect due to the increasing necessity to lower consumption and increase safety and automation.
4. The IP management is relatively simple for this product, since the code is property of Seaplace, and it cannot be copied easily because it requires adjustment for each unit.
5. Return of Investment (ROI): With EU funding the investment will be fully recovered in 2 years since the beginning of the commercialization.
6. The expected profit is 20% for each product sold (from 4,065 € to 9,381 €/product).

Considering EU (European Union) global challenges:
o We understand SeaDP-1C will ignite a competitive race to spread in a general base DP1 solutions into the market, incrementing the number of units with DP and enabling safer marine operations.
o The DP green smart controller will reduce the consumption and CO2 emissions, as demanded by the implementation of the mandatory regulations on Energy Efficiency for Ships (MARPOL Annex VI).